Fraudsters took advantage of weak link in dispensing technology

The Kollam police in Kerala on Sunday claimed to have busted an inter-State gang involved in a multi-crore ATM fraud.

Acting on definite leads, the police arrested two persons Sunny Gupta (27) and Ramadeep Singh (30) from Mohali in Punjab. Their interrogation led to the arrest of two more persons in Kollam the next day.

They were identified as Ashish Arora (24), and Sumitkumar Arora (28), natives of Ludhiana in Punjab.

A number of banks in Kollam that found themselves at the receiving end had lodged a complaint with the City Police Commissioner, Mr Debesh Kumar Behera.

Mr Behera constituted a special team led by the Assistant Police Commissioner, Mr Thomson Jose, to crack the case. The police said that the accused opened bogus accounts in the name of various persons, mainly residing in the northern parts of the country and forged ATM cards. The police recovered more than 500 forged ATM cards from them.

Talking about how they operated, the police said they would fly down to Kerala, stay in posh hotels and travel in luxury cars. They would conduct their operations at ATMs mainly located on the highways. Job done, they would take a flight back home. The accused have been found to be linked to at least 24 such cases registered at various police stations in Kerala.

The police said that the fraudsters took advantage of a ‘weak link’ in ATM dispenser-cum-presenter technology to illegally withdraw huge money.

They would ‘create an error condition’ at the ATM resulting in a transaction reversal. For instance, the forged ATM card is used to withdraw Rs 1,000. Only a portion of the notes is taken, leaving the rest in the presenter (tray).

Several seconds later, the ATM would time out and send an error message, and then retract the remaining notes.

The dispenser is not programmed to count the retracted notes, and the transaction is reversed – or cancelled, restoring the account to original position showing no withdrawal.

These transactions are repeated many times over and at multiple ATMs to draw even more illegal sums of money.

(This article was published on June 26, 2012)
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